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Adobe Inc. shares rallied in the extended session Wednesday after the software company topped Wall Street expectations for the quarter and hiked its outlook, while anticipating its acquisition of interactive-design platform Figma will close by the end of the year.
Adobe ADBE shares rose 5% after hours, following a less than 0.1% gain to close the regular session at $333.61.
The…
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Silicon Valley Bank has failed following a run on deposits, after its parent company’s share price crashed a record 60% on Thursday.
Trading of SVB Financial Group’s
SIVB,
stock was halted early Friday, after the shares plunged again in premarket trading. Treasury Secretary Janet Yellen said SVB was one of a few banks she was “monitoring very carefully.” Reaction poured in from several analysts who discussed the bank’s liquidity risk.
California regulators closed Silicon Valley Bank and handed the wreckage over to the Federal Deposit Insurance Administration later on Friday.
Below is the same list of 10 banks we highlighted on Thursday that showed similar red flags to those shown by SVB Financial through the fourth quarter. This time, we will show how much they reported in unrealized losses on securities — an item that played an important role in SVB’s crisis.
Below that is a screen of U.S. banks with at least $10 billion in total assets, showing those that appeared to have the greatest exposure to unrealized securities losses, as a percentage of total capital, as of Dec. 31.
Some media reports have referred to SVB of Santa Clara, Calif., as a small bank, but it had $212 billion in total assets as of Dec. 31, making it the 17th largest bank in the Russell 3000 Index
RUA,
as of Dec. 31. That makes it the largest U.S. bank failure since Washington Mutual in 2008.
One unique aspect of SVB was its decades-long focus on the venture capital industry. The bank’s loan growth had been slowing as interest rates rose. Meanwhile, when announcing its $21 billion dollars in securities sales on Thursday, SVB said it had taken the action not only to lower its interest-rate risk, but because “client cash burn has remained elevated and increased further in February, resulting in lower deposits than forecasted.”
SVB estimated it would book a $1.8 billion loss on the securities sale and said it would raise $2.25 billion in capital through two offerings of new shares and a convertible bond offering. That offering wasn’t completed.
So this appears to be an example of what can go wrong with a bank focused on a particular industry. The combination of a balance sheet heavy with securities and relatively light on loans, in a rising-rate environment in which bond prices have declined and in which depositors specific to that industry are themselves suffering from a decline in cash, led to a liquidity problem.
Banks leverage their capital by gathering deposits or borrowing money either to lend the money out or purchase securities. They earn the spread between their average yield on loans and investments and their average cost for funds.
The securities investments are held in two buckets:
In its regulatory Consolidated Financial Statements for Holding Companies—FR Y-9C, filed with the Federal Reserve, SVB Financial, reported a negative $1.911 billion in accumulated other comprehensive income as of Dec. 31. That is line 26.b on Schedule HC of the report, for those keeping score at home. You can look up regulatory reports for any U.S. bank holding company, savings and loan holding company or subsidiary institution at the Federal Financial Institution Examination Council’s National Information Center. Be sure to get the name of the company or institution right — or you may be looking at the wrong entity.
Here’s how accumulated other comprehensive income (AOCI) is defined in the report: “Includes, but is not limited to, net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, cumulative foreign currency translation adjustments, and accumulated defined benefit pension and other postretirement plan adjustments.”
In other words, it was mostly unrealized losses on SVB’s available-for-sale securities. The bank booked an estimated $1.8 billion loss when selling “substantially all” of these securities on March 8.
On the regulatory call reports, AOCI is added to regulatory capital. Since SVB’s AOCI was negative (because of its unrealized losses on AFS securities) as of Dec. 31, it lowered the company’s total equity capital. So a fair way to gauge the negative AOCI to the bank’s total equity capital would be to divide the negative AOCI by total equity capital less AOCI — effectively adding the unrealized losses back to total equity capital for the calculation.
Getting back to our list of 10 banks that raised similar red margin flags to those of SVB, here’s the same group, in the same order, showing negative AOCI as a percentage of total equity capital as of Dec. 31. We have added SVB to the bottom of the list. The data was provided by FactSet:
| Bank | Ticker | City | AOCI ($mil) | Total equity capital ($mil) | AOCI/ TEC – AOCI | Total assets ($mil) |
| Customers Bancorp Inc. |
CUBI, |
West Reading, Pa. | -$163 | $1,403 | -10.4% | $20,896 |
| First Republic Bank |
FRC, |
San Francisco | -$331 | $17,446 | -1.9% | $213,358 |
| Sandy Spring Bancorp Inc. |
SASR, |
Olney, Md. | -$132 | $1,484 | -8.2% | $13,833 |
| New York Community Bancorp Inc. |
NYCB, |
Hicksville, N.Y. | -$620 | $8,824 | -6.6% | $90,616 |
| First Foundation Inc. |
FFWM, |
Dallas | -$12 | $1,134 | -1.0% | $13,014 |
| Ally Financial Inc. |
ALLY, |
Detroit | -$4,059 | $12,859 | -24.0% | $191,826 |
| Dime Community Bancshares Inc. |
DCOM, |
Hauppauge, N.Y. | -$94 | $1,170 | -7.5% | $13,228 |
| Pacific Premier Bancorp Inc. |
PPBI, |
Irvine, Calif. | -$265 | $2,798 | -8.7% | $21,729 |
| Prosperity Bancshare Inc. |
PB, |
Houston | -$3 | $6,699 | -0.1% | $37,751 |
| Columbia Financial, Inc. |
CLBK, |
Fair Lawn, N.J. | -$179 | $1,054 | -14.5% | $10,408 |
| SVB Financial Group |
SIVB, |
Santa Clara, Calif. | -$1,911 | $16,295 | -10.5% | $211,793 |
| Source: FactSet | ||||||
Click on the tickers for more about each bank.
Read Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.
Ally Financial Inc.
ALLY,
— the third largest bank on the list by Dec. 31 total assets — stands out as having the largest percentage of negative accumulated comprehensive income relative to total equity capital as of Dec. 31.
To be sure, these numbers don’t mean that a bank is in trouble, or that it will be forced to sell securities for big losses. But SVB had both a troubling pattern for its interest margins and what appeared to be a relatively high percentage of securities losses relative to capital as of Dec. 31.
There are 108 banks in the Russell 3000 Index
RUA,
that had total assets of at least $10.0 billion as of Dec. 31. FactSet provided AOCI and total equity capital data for 105 of them. Here are the 20 which had the highest ratios of negative AOCI to total equity capital less AOCI (as explained above) as of Dec. 31:
| Bank | Ticker | City | AOCI ($mil) | Total equity capital ($mil) | AOCI/ (TEC – AOCI) | Total assets ($mil) |
| Comerica Inc. |
CMA, |
Dallas | -$3,742 | $5,181 | -41.9% | $85,406 |
| Zions Bancorporation N.A. |
ZION, |
Salt Lake City | -$3,112 | $4,893 | -38.9% | $89,545 |
| Popular Inc. |
BPOP, |
San Juan, Puerto Rico | -$2,525 | $4,093 | -38.2% | $67,638 |
| KeyCorp |
KEY, |
Cleveland | -$6,295 | $13,454 | -31.9% | $189,813 |
| Community Bank System Inc. |
CBU, |
DeWitt, N.Y. | -$686 | $1,555 | -30.6% | $15,911 |
| Commerce Bancshares Inc. |
CBSH, |
Kansas City, Mo. | -$1,087 | $2,482 | -30.5% | $31,876 |
| Cullen/Frost Bankers Inc. |
CFR, |
San Antonio | -$1,348 | $3,137 | -30.1% | $52,892 |
| First Financial Bankshares Inc. |
FFIN, |
Abilene, Texas | -$535 | $1,266 | -29.7% | $12,974 |
| Eastern Bankshares Inc. |
EBC, |
Boston | -$923 | $2,472 | -27.2% | $22,686 |
| Heartland Financial USA Inc. |
HTLF, |
Denver | -$620 | $1,735 | -26.3% | $20,244 |
| First Bancorp |
FBNC, |
Southern Pines, N.C. | -$342 | $1,032 | -24.9% | $10,644 |
| Silvergate Capital Corp. Class A |
SI, |
La Jolla, Calif. | -$199 | $603 | -24.8% | $11,356 |
| Bank of Hawaii Corp |
BOH, |
Honolulu | -$435 | $1,317 | -24.8% | $23,607 |
| Synovus Financial Corp. |
SNV, |
Columbus, Ga. | -$1,442 | $4,476 | -24.4% | $59,911 |
| Ally Financial Inc |
ALLY, |
Detroit | -$4,059 | $12,859 | -24.0% | $191,826 |
| WSFS Financial Corp. |
WSFS, |
Wilmington, Del. | -$676 | $2,202 | -23.5% | $19,915 |
| Fifth Third Bancorp |
FITB, |
Cincinnati | -$5,110 | $17,327 | -22.8% | $207,452 |
| First Hawaiian Inc. |
FHB, |
Honolulu | -$639 | $2,269 | -22.0% | $24,666 |
| UMB Financial Corp. |
UMBF, |
Kansas City, Mo. | -$703 | $2,667 | -20.9% | $38,854 |
| Signature Bank |
SBNY, |
New York | -$1,997 | $8,013 | -20.0% | $110,635 |
Again, this is not to suggest that any particular bank on this list based on Dec. 31 data is facing the type of perfect storm that has hurt SVB Financial. A bank sitting on large paper losses on its AFS securities may not need to sell them. In fact Comerica Inc.
CMA,
which tops the list, also improved its interest margin the most over the past four quarters, as shown here.
But it is interesting to note that Silvergate Capital Corp.
SI,
which focused on serving clients in the virtual currency industry, made the list. It is shuttering its bank subsidiary voluntarily.
Another bank on the list facing concern among depositors is Signature Bank
SBNY,
of New York, which has a diverse business model, but has also faced a backlash related to the services it provides to the virtual currency industry. The bank’s shares fell 12% on Thursday and were down another 24% in afternoon trading on Friday.
Signature Bank said in a statement that it was in a “strong, well-diversified financial position.”
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Oracle Corp. shares recouped some of their losses in the extended session Thursday after the forecast revenue range bookended the Wall Street consensus, as the software company’s largest business unit topped forecasts, but its others didn’t.
Oracle
ORCL,
shares were down about 3.5% after hours following the forecast. Prior to the forecast, shares had dropped more than 5% and were around those levels when a conference call with analysts began. Oracle shares declined 1.8% in the regular session to close at $86.87.
On the call with analysts, Oracle Chief Executive Safra Catz forecast fourth-quarter earnings of $1.56 to $1.60 a share on revenue growth of 15% to 17%, or $13.62 billion to $13.85 billion. Analysts surveyed by FactSet had estimated $1.47 a share on revenue of $13.75 billion.
That followed fiscal third-quarter results in which Oracle reported net income of $1.9 billion, or 68 cents a share, compared with $2.32 billion, or 84 cents a share, a year ago.
Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.22 a share, compared with $1.13 a share in the year-ago period.
Revenue rose to $12.4 billion from $10.51 billion in the year-ago quarter.
Analysts had estimated earnings of $1.20 a share and revenue of $12.43 billion for the third quarter.
Oracle’s largest segment, cloud services and license support, rose 17% to $8.92 billion. Cloud license and on-premise license revenue was flat at $1.29 billion from a year ago, while hardware revenue rose 2% to $811 million, and services revenue jumped 74% to $1.38 billion.
Analysts had forecast cloud services and license support revenue of $8.83 billion, cloud license and on-premise license revenue of $1.39 billion, hardware revenue of $815.5 million and services revenue of $1.43 billion.
“Since June of last year when we acquired Cerner, that business has increased its healthcare contract base by approximately $5 billion,” said Larry Ellison, Oracle’s chairman, in a statement. “While we are pleased with this early success of the Cerner business, we expect the signing of new healthcare contracts to accelerate over the next few quarters.”
Oracle’s board also hiked the quarterly dividend 25% to 40 cents a share. The dividend will be paid April 24 to shareholders of record as of April 11.
Oracle shares are up 14% over the past 12 months, versus a 14% decline by the iShares Expanded Tech-Software Sector ETF
IGV,
while the S&P 500 index
SPX,
has dropped 8% and the tech-heavy Nasdaq Composite Index
COMP,
has fallen 14% in that time.
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Asana Inc. on Wednesday reported and forecast narrower-than-expected losses, saying the figures reflected a firmer path to profitability, and its stock skyrocketed in after-hours trading.
The project-management software provider — whose chief executive is a co-founder of Meta Platforms Inc.’s
META,
Facebook — forecast first-quarter sales of $150 million to $151 million, with an adjusted net loss of between 18 cents and 19 cents a share. That’s better than FactSet forecasts for a 23-cent per-share loss with revenue of $150.4 million.
For the full year, Asana
ASAN,
said it expects revenue of between $638 million and $648 million, with an adjusted net loss of 55 cents to 59 cents. Analysts polled by FactSet expected a 79 cent-per-share loss, on sales of $645.8 million.
The company reported a fourth-quarter net loss of $95 million, or 44 cents a share. That compares with a loss of $90 million, or 48 cents a share, in the same quarter last year. Revenue rose 34% to $150.2 million, compared with $111.9 million in the same quarter last year.
Adjusted for stock-based compensation, restructuring and other costs, Asana lost 15 cents a share, compared with 25 cents a year earlier.
Analysts polled by FactSet expected Asana to reported an adjusted loss of 27 cents a share, on revenue of $145.1 million.
Shares soared 24% after hours.
The company reported earnings as other workplace-oriented cloud-services platforms, like Salesforce Inc.
CRM,
and Workday
WDAY,
scale back and lay off workers. The tech industry has tried to shrink, after hiring to meet digital demand brought by the pandemic that later fizzled as COVID restrictions lifted.
Shares of Asana have fallen 60% over the past two months. By comparison, the S&P 500 Index
SPX,
has lost 4.3% of its value over that period.
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https://www.barrons.com/articles/stock-market-movers-6acba64b
Stock futures traded mostly flat Monday as Wall Street kicked off a week that includes testimony before Congress from Federal Reserve Chairman Jerome Powell and the U.S. jobs report for February.
These stocks were poised to make moves Monday:
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Silicon Valley could use a reboot. The biggest players aren’t growing, and more than a few are seeing sharp revenue declines. Regulators seem opposed to every proposed merger, while legislators push for new rules to crack down on the internet giants. The Justice Department just can’t stop filing antitrust suits against Google. The initial public offering market is closed. Venture-capital investments are plunging, along with valuations of prepublic companies. Maybe they should try turning the whole thing on and off.
The only strategy that seems to be working is to lay people off. Tech CEOs suddenly are channeling Marie Kondo, tidying up and keeping only the people and projects that “spark joy,” or at least support decent operating margins. Layoffs.fyi reports that tech companies have laid off more than 122,000 people already this year.
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Meta will slash the prices of its Quest 2 and high-end Quest Pro headsets, the company announced Friday.
The price of the 256GB Meta Quest 2 will drop from $499.99 to $429.99, while the price of the higher-end Meta Quest Pro will be slashed to $999.99 from $1,499.99.
Meta lost $13.7 billion on its Reality Labs segment in 2022. That’s the business unit responsible for building the company’s ambitious metaverse technologies. Reality Labs generated revenue of $727 million in the fourth quarter, and $2.16 billion for all of 2022 — a decline from $2.27 billion in 2021 — including sales of Quest headsets.
The Meta’s Quest Pro headset which according to the company has outward-facing cameras that capture the user’s physical environment in full color and enable the overlay of virtual elements like 3D models, drawings and screens, is seen in this undated handout picture.
Meta | via Reuters
The Meta Quest Pro was launched in October, but its high price put it out of reach for most consumers. And there didn’t seem to be a clear professional use case either. The lower price could make it more attractive to both audiences.
“Our goal has always been to create hardware that’s affordable for as many people as possible to take advantage of all that VR has to offer,” the company said in a release. The price change will begin rolling out on March 5 for the Meta Quest 2.
U.S. and Canadian buyers will also see the Quest Pro’s new price on March 5. Its price will drop for the rest of the world on March 15.
— CNBC’s Ari Levy contributed to this report.
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Dell Inc. on Thursday reported fourth-quarter and full-year results that beat Wall Street expectations, but executives issued a cautious outlook that weighed on the company’s stock in extended trading.
Dell
DELL,
shares initially jumped more than 6% higher after hours, after falling about 0.7% in the regular session to close at $40.17, before swinging to a loss after executives provided a cautious outlook on the earnings call. They are down almost 3% as of 5 p.m. Eastern time.
The computer company posted record sales for the year, though its fourth-quarter sales were down year over year. But on the call, executives said both corporate and consumer spending are slowing, though they expected things to get better later in the year.
Chief Financial Officer Tom Sweet said on the call that he expects first-quarter revenue to be down 15% to 21% year over year, more than the seasonal average.
“The broad caution in the IT spending environment that we called out in Q2 continues,” Chuck Whitten, co-chief operating officer, said on the call.
Dell reported fourth-quarter net income of $606 million, or 84 cents a share, compared with a loss of $29 million, or 4 cents a share, in the year-ago period. Adjusted for stock-based compensation, amortization and other costs, earnings were $1.32 billion, or $1.80 a share. Revenue fell to $25 billion from almost $28 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted net income of $1.2 billion, or $1.64 a share, on revenue of $23.42 billion.
For the full year, Dell reported net income of $2.42 billion, or $3.24 a share, on revenue of $102.3 billion. Adjusted earnings were $7.61 a share, adjusted for stock-based compensation, amortization and other costs. Analysts had expected adjusted earnings of $7.46 a share on $100.6 billion in revenue.
The company also announced a 12% increase in its annual cash dividend, to $1.48 a share.
In addition, Sweet will retire at the end of the second quarter, and current corporate controller Yvonne McGill will become CFO at that time, according to a company news release.
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CNN
—
Microsoft will roll out on Tuesday an update to Windows 11 that puts its new AI-powered Bing capabilities front and center on its taskbar, one of the operating system’s most widely used features, in the latest sign the company is doubling down on the buzzy technology despite some recent controversy.
With the update, the AI tool will be accessible from the Windows search box, which allows users to directly access files, settings and perform web queries. The search bar has more than half a billion users every month, according to the company, making it prime real estate for eventually exposing more users to the new feature. (A preview version of the AI tool remains available on a limited basis.)
Earlier this month, Microsoft said it was looking for ways to rein in Bing’s AI chatbot after users highlighted responses that ranged from inaccurate to emotionally reactive. Despite such early hiccups, the company told CNN “as a whole, we are feeling very good about the product experience for people” and continues to learn from feedback.
“AI itself is reinventing right now … and it’s just the beginning,” Panos Panay, Microsoft’s chief product officer, told CNN ahead of Tuesday’s launch. He likened the AI changes coming to the PC to how the keyboard and mouse changed the way we interact with computers.
However, only users of the new Bing preview will have access to its additional AI capabilities out of the gate. The company will continue to add users to the preview who have signed up for the new Bing waitlist. “We want to thoughtfully and responsibly scale it up,” Panay said.
Last year, Microsoft unveiled several AI-powered Windows 11 features, such as quieting background noise like lawnmowers and baby cries on video calls and automatic framing so the camera follows the speaker’s movements. It also automated some of its accessibility tools, such as live video captions.
Its efforts around AI have only grown. Earlier this year, Microsoft confirmed it is making a “multibillion dollar” investment in OpenAI, the company behind the viral AI chatbot tool ChatGPT. Microsoft launched its AI chatbot tool in early February; one million people have since tried it out in 169 countries, according to Microsoft. The company has since expanded it to the Bing and Edge browser mobile apps and Skype.
But adding it to the Windows’ search bar is a high vote of confidence from the company and reflects its greater effort to “go all-in on AI,” according to Patrick Moorhead, president and principal analyst at Moore Insights and Strategy.
The Bing integration is just one of several notable updates coming to Windows 11. Microsoft is also taking steps to improve the Windows experience for Apple and Samsung users.
Apple users will now be able to receive iOS alerts and messages directly on their Windows 11 devices, potentially chipping away at Apple’s closed ecosystem. (Android users have been able to receive messages on Windows devices since 2018.) The new iOS support does not, however, work with replying to group iMessages or sending media such as photos and videos in messages.
Microsoft said its move to add iOS messages to PCs was not done directly in partnership with Apple; instead it’s done via Bluetooth technology. Moorhead said Apple “has been very reticent to open up its iMessage APIs to vendors like Microsoft, which could improve the Windows experience.”
“This is what customers need and want, so we went and designed it to make sure it was in there for our users on the Microsoft side,” Panay said. “I know our customers need their iPhones to work on their PC, and I [want] to do everything I can to help them do that.”
For Samsung device users, Microsoft is making it easier to activate their phone’s personal hotspot with a single click from within the Wi-Fi network list on their PC. It’s also adding a Recent Websites feature that allows users to transfer their browser sessions from their smartphone to their Windows PC.
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Editor’s Note: Sign up for Unlocking the World, CNN Travel’s weekly newsletter. Get news about destinations opening, inspiration for future adventures, plus the latest in aviation, food and drink, where to stay and other travel developments.
CNN
—
This week in travel news: the best time and day to book your flights, new business and first class cabins for Qantas and Air France, and the only woman living on an island populated by convicted criminals.
With some airfares up by as much as 50%, it’s more crucial than ever to get smart about your booking strategy. An expert at travel site Hopper tells CNN you should start tracking your May, June and July vacations now. And there’s a “Goldilocks window” for booking – not too early, not too late – says another expert from travel site Going.
Get your laptop and credit card out on a Sunday to stand the best chance of securing the best deals, says booking platform Expedia. You can refine your search further with flight comparison site Skyscanner’s new Savings Generator, launched this month. Plug in your departure city, your destination and when you’d like to travel, and it’ll help you pinpoint the best time to book and the cheapest time to travel.
If you’re an airline planning to launch record-breaking new 19-hour flights connecting Australia with New York and London, you’d better make darn sure you’re offering your customers a comfortable experience – especially for those shelling out the big dollars in the front section.
Qantas has revealed the first and business class prototypes for the Airbus A350s that will be serving its new “Project Sunrise” routes that are slated to launch in 2025. The airline says its First Suite will feel like “a mini boutique hotel.”
That follows the unveiling last month of Air France’s swanky new long-haul business cabin, complete with sliding doors and redesigned seats. It debuted on a Boeing 777-300ER flying Paris-New York and the first destinations it will serve are New York, Rio de Janeiro and Dakar, Senegal.
Back in 2011, Giulia Manca went to a former Italian prison island in search of a relaxing break. Twelve years later, she’s the only woman living on an island populated by convicted criminals and is loving life in the “Alcatraz of the Tyrrhenian Sea.”
Over in Mexico, one of the country’s most notorious prisons began a new chapter in December as a Pacific Ocean getaway. The former penal colony on the Islas Marías archipelago now boasts a tourism center, restaurant and cafe, as well as villas for guests to stay in before hitting the beaches.
Dubai could be getting an indoor, climate-controlled, 93-kilometer cycling superhighway looping round the city, if developer URB gets its way. The greenery-filled corridor “aims to make Dubai the most connected city on Earth by foot or bike.”
The move could perhaps earn the Middle Eastern hub a future spot on our list of the world’s best cities to see by bike: destinations in North America, Scandinavia and Asia Pacific all make the current roundup.
Two people who have a better knowledge than most of global cycling culture are British couple Laura Massey-Pugh and Stevie Massey, who last year became the fastest cyclists to circumnavigate the world on a tandem bicycle.
Anthony met Barbara at a Greek ferry port in the summer of 1969. He was a 28-year-old American college graduate with a third-class ticket and she was a 24-year-old flight attendant for Air France, traveling in second class.
Like Jack and Rose in “Titanic,” the boat’s class divisions didn’t stand in the way of love. Here’s how Anthony jumped the barriers to the meet the woman who’d be his bride.
What dinky little travel essential are you most likely to lose – and most likely to mourn when you do? For many of us, the answer is earphones.
If you’re someone whose most cherished travel companion is a playlist or podcast, but also doesn’t like to break the bank on something that could end up on the floor of a foreign city’s metro system, take a look at this guide to best budget earbuds. It’s been put together by our partners at CNN Underscored, a product reviews and recommendations guide owned by CNN.
After a brief hiatus, we’re sorry to say unruliness is back. An American Airlines flight was diverted to a North Carolina airport on February 22 due to a disruptive passenger. The woman was taken into custody, but a misdemeanor charge was dismissed.
An Airbnb plumbing disaster led to a beautiful continent-spanning friendship.
Turn on the waterworks, this one will touch your heart.
This Asian nation has the world’s most “powerful” passport.
So why aren’t its citizens using it?
What it’s like to live off grid in a traditional Maya village.
And why their lifestyle is now under threat.
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Intel
is cutting its dividend. In a treacherous environment for the economy and profits, more companies could do the same.
On Wednesday, Intel (ticker: INTC) cut its dividend by 66% to an annual 50 cents a share, helping push the stock down about 16% in the past month. Intel has lost market share for chips to
Advanced Micro Devices
(AMD) and has struggled to meet Wall Street’s earnings targets. Weighing on earnings is weak PC demand, with year-over-year declines in sales. A dividend cut this large may partly reflect the economic environment, but also the company’s own problems.
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CNN
—
Microsoft announced it has agreed to partnerships with Nvidia and Nintendo as it tries to convince European Union officials to approve its $69 billion purchase of Activision Blizzard — the company behind the popular game franchise Call of Duty.
Microsoft President Brad Smith had a closed-door meeting Tuesday with EU regulators and competitors in Brussels to address concerns that its acquisition of Activision Blizzard could hurt competition in the video game industry. The deal has also come under scrutiny from regulators in the United States and the United Kingdom.
Microsoft
(MSFT) said that it has entered into a 10-year partnership with Nvidia to bring Xbox PC games to Nvidia’s cloud gaming service. In a statement, the software giant said the partnership “resolves Nvidia’s concerns with Activision Blizzard. Nvidia therefore is offering its full support for regulatory approval of the acquisition.”
Microsoft also revealed it has finalized a 10-year agreement to bring the latest version of “Call of Duty” to the Nintendo platform once the merger with Activision is completed.
Smith told CNN’s Richard Quest on Tuesday that “a lot changed today because Microsoft has announced two agreements that together will bring Call of Duty, the game that everyone has been talking about, to 150 million more people on Nintendo devices and Nvidia’s cloud streaming services.” He went on to say these two deals address the concern that Call of Duty will be less available than it is today and will be more available instead due to these two binding agreements.
“We’re really down to one principal company that is objecting to this deal, and that’s Sony, and we’ve made clear that we’re happy to enter a 10-year agreement with Sony and we’re prepared to enter regulatory obligations as well, whether it’s London or Brussels or Washington,” Smith said. “So, in addition to a contract, we’d have a duty under the law.”
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https://www.barrons.com/articles/stock-market-movers-5b0c54ae
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Nvidia
should be insulated from any slowdown in the broader economy by increased spending on artificial intelligence, say analysts at Oppenheimer, who lifted their price target for the semiconductor company.
The heightened interest around artificial-intelligence should set investors’ minds at ease ahead of
Nvidia
‘s earnings next week, say the analysts, with the semiconductor maker’s commentary on data-center spending in focus.
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Cisco
Systems shares are trading sharply higher in late trading Wednesday after the networking equipment provider posted solid results for its fiscal second quarter ended Jan. 28, while sharply increasing its outlook for the full year.
Cisco now expects fiscal 2023 to be its best growth year in at least a decade. The strong earnings report and surprising outlook should provide a boost to investor sentiment on the outlook for enterprise technology spending.
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New York
CNN
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Several US mobile carriers experienced technical difficulties Monday night.
DownDetector, a website that tracks service problems and outages, indicated that AT&T, T-Mobile, Verizon and Boost Mobile all experienced a spike in reports Monday night.
It was unclear if the problems were connected.
Neville Ray, president of technology for T-Mobile, tweeted late Monday that the company was “addressing a 3rd party fiber interruption issue that has intermittently impacted some voice, messaging and data services in several areas.”
Ray later tweeted that T-Mobile had “seen significant improvement and [is] operating at near normal levels.”
It was unclear which geographical areas were affected by the issues.
AT&T, Verizon and Boost Mobile could not be immediately reached for comment.
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CNN Business
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Let’s be honest: For much of the past decade, tech events have been pretty boring.
Executives in business casual wear trot up on stage and pretend a few tweaks to the camera and processor make this year’s phone profoundly different than last year’s phone or adding a touchscreen onto yet another product is bleeding edge.
But that changed radically this week. Some of the world’s biggest companies teased significant upgrades to their services, some of which are central to our everyday lives and how we experience the internet. In each case, the changes were powered by new AI technology that allows for more conversational and complex responses.
On Tuesday, Microsoft announced a revamped Bing search engine using the capabilities of ChatGPT, the viral AI tool created by OpenAI, a company in which Microsoft recently invested billions of dollars. Bing will not only provide a list of search results, but will also answer questions, chat with users and generate content in response to user queries. And there are already rumors of another event next month for Microsoft to demo similar features in its Office products, including Word, PowerPoint and Outlook.
On Wednesday, Google held an event to detail how it plans to use similar AI technology to allow its search engine to offer more complex and conversational responses to queries. Chinese tech giants Alibaba and Baidu also said this week that they would be launching their own ChatGPT-style services. And other companies are sure to follow suit soon.
After years of incremental updates to smartphones, the promise of 5G that still hasn’t taken off and social networks copycatting each others’ features until they all the look the same, the flurry of AI-related announcements this week feels like a breath of fresh air.
Yes, there are very real concerns about the potential of this technology to spread biases and inaccurate information, as happened in a Google demo this week. And it’s certainly likely numerous companies will introduce AI chatbots that simply do not need one. But these features are fun, have the potential to give us back hours in the day and, perhaps most importantly, some are here right now to try out.
Need to write a real estate listing or an annual review for an employee? Plug a few keywords into a ChatGPT query bar and your first draft is done in three seconds. Want to come up with a quick meal plan and grocery list based on your dietary sensitivities? Bing, apparently, has you covered.
If the introduction of smartphones defined the 2000s, much of the 2010s in Silicon Valley was defined by the ambitious technologies that didn’t fully arrive: self-driving cars tested on roads but not quite ready for everyday use; virtual reality products that got better and cheaper but still didn’t find mass adoption; and the promise of 5G to power advanced experiences that didn’t quite come to pass, at least not yet.
But technological change, like Ernest Hemingway’s idea of bankruptcy, has a way of coming gradually, then suddenly. The iPhone, for example, was in development for years before Steve Jobs wowed people on stage with it in 2007. Likewise, OpenAi, the company behind ChatGPT, was founded seven years ago and launched an earlier version of its AI system called GPT3 back in 2020.
“ChatGPT exploded onto the market and people’s awareness,” said Bern Elliot, an analyst at Gartner, “but this has been a long time in the making.”
More than that, artificial intelligence systems have for years underpinned many of the functions people may now take for granted, from content recommendations on social media platforms and auto-complete tools in e-mail to voice assistants and facial recognition tools. But when ChatGPT was released publicly in November, it put the power of AI systems on full display for millions in an entertaining and immediately graspable way. ChatGPT simultaneously made it much easier to see how far the technology has progressed in recent years and to imagine the vast potential for the impact it could have across industries.
“When new generations of technologies come along, they’re often not particularly visible because they haven’t matured enough to the point where you can do something with them,” Elliott said. “When they are more mature, you start to see them over time — whether it’s in an industrial setting or behind the scenes — but when it’s directly accessible to people, like with ChatGPT, that’s when there is more public interest, fast.”
Now that ChatGPT has gained traction and prompted larger companies to deploy similar features, there are concerns not just about its accuracy but its impact on real people.
Some people worry it could disrupt industries, potentially putting artists, tutors, coders, writers and journalists out of work. Others are more optimistic, postulating it will allow employees to tackle to-do lists with greater efficiency or focus on higher-level tasks. Either way, it will likely force industries to evolve and change, but that’s not? necessarily a bad thing.
“New technologies always come with new risks and we as a society will have to address them, such as implementing acceptable use policies and educating the general public about how to use them properly. Guidelines will be needed,” Elliott said.
Many experts I’ve spoken with in the past few weeks have likened the AI shift to the early days of the calculator and how educators and scientists once feared how it could inhibit our basic knowledge of math. The same fear existed with spell check and grammar tools.
While AI tools are still in their infancy, this week may represent the start of a new way of doing tasks, similar to how the iPhone changed computing and communication in June 2007. But this time, it could be in the form of a Bing browser.
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New Delhi
CNN
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As Apple looks beyond China to secure crucial supply chains strained by Covid lockdowns and threatened by rising geopolitical tension, India has emerged as an attractive potential alternative to the world’s second largest economy.
And Beijing’s big regional rival isn’t missing a beat in talking up the opportunity. One of India’s top ministers said last month the California-based company wants to ramp up its production in the South Asian country to a quarter of its overall total.
Minister of Commerce and Industry Piyush Goyal said Apple was already making between 5% and 7% of its products in India. “If I am not mistaken, they are targeting to go up to 25% of their manufacturing,” he said at an event in January.
His comments come at a time when Foxconn
(HNHPF), a top Apple supplier, is looking to expand its operations in India after suffering severe supply disruptions in China.
For years, Apple had relied on a vast manufacturing network in China to mass produce iPhones, iPads and other popular products. But its dependence on the country was tested last year by Beijing’s strict zero-Covid strategy, which was rapidly dismantled last December.
Since the middle of last year, Apple has redoubled its efforts to invest in India. But can Asia’s third largest economy deliver?
“Theoretically, it can be done, but it won’t be happening overnight,” said Tarun Pathak, a research director at market research firm Counterpoint.
“[Apple’s] dependency on China is a result of almost two and a half decades of what China put in to develop their entire electronics manufacturing ecosystem,” Pathak said, adding that the company makes nearly 95% of its phones in China.
Apple did not respond to requests for comment from CNN.
But the world’s most valuable company posted shockingly weak earnings this month, partly because of its recent problems in China. The troubles started in October, when workers began fleeing the world’s biggest iPhone factory, run by Foxconn, over a Covid outbreak.
Short on staff, Foxconn offered bonuses to workers to return. But violent protests broke out in November, when newly-hired staff said management had reneged on their promises. Workers clashed with security officers, before the company eventually offered them cash to quit and leave the site.
While operations at the sprawling campus in Zhengzhou, central China, have now returned to normal, the supply problems hit the supply of iPhone 14 Pro and iPhone 14 Pro Max models during the key holiday shopping season.
Foxconn did not respond to a request for comment.
On top of that, US-China relations are looking increasingly tense. Last year, the Biden administration banned Chinese companies from buying advanced chips and chipmaking equipment without a license.
“I think they will continue to depend on China for a significant proportion of their production,” said Willy Shih, a professor at Harvard Business School, referring to Apple.
“But what they are trying to do, and I think it makes sense, is to add diversity to their supply base so that if something goes wrong in China, they will have some alternatives.”
Shih referred to this strategy as “China +1 or China+ more than one.”
“India is a hugely exciting market for us and a major focus,” Apple CEO Tim Cook said on a recent earnings call.
“Looking at the business in India, we set a quarterly revenue record and grew very strong double digits year over year and so we feel very good about how we performed,” he said.
India is set to overtake China this year to become the world’s most populous country. The country’s massive and cheap labor force, which includes workers with key technical skills, is a big draw for manufacturers.
Asia’s third largest economy also offers a growing domestic market. In 2023, as global recession fears persist, India is expected to remain the fastest growing major economy in the world.
If it can sustain that momentum, India could become only the third country with GDP worth $10 trillion by 2035, according to the Centre for Economics and Business Research.
Analysts say India’s growing consumer base might give it an edge over Vietnam, which has also been attracting greater investment in electronics manufacturing.
The Indian government has rolled out policies to attract investments in mobile phone manufacturing. According to Counterpoint’s Pathak, India accounts for 16% of the global smartphone production, while China constitutes 70%.
There are some success stories: Samsung, the world’s top selling smartphone brand, is one step ahead of Apple and already makes a lot of its phones in India.
The South Korean giant has been diversifying away from China because of rising labor costs and also stiff local competition from homegrown players such as Huawei, Oppo, Vivo and Xiaomi.
It now makes the bulk of its phones in Vietnam and India, with the latter accounting for 20% of Samsung’s global production.
In 2018, Samsung opened what it called “the world’s largest mobile factory” in Noida, a city near New Delhi, and analysts say the the company may have paved the way for other manufacturers.
Apple devices are manufactured in India by Taiwan’s Foxconn, Wistron and Pegatron. Until recently, the company would typically start assembling models in the country only seven to eight months after launch. That changed last year, when Apple started making new iPhone 14 devices in India weeks after they went on sale.
Some of Apple’s biggest contractors are already pumping more money into India. Last year, Foxconn announced it had invested half a billion dollars in its Indian subsidiary.
Earlier this week, the government of the southern Indian state of Karnataka said it is “in serious discussion of investment plans” with the Taiwanese giant. Foxconn already has factories in the Andhra Pradesh and Tamil Nadu.
Manufacturing in India, however, comes with myriad challenges. It constitute only 14% of India’s GDP, according to the World Bank, and the government has struggled to grow that figure.
“One of the things that China did is they built infrastructure when they could. And I would argue that India did not build infrastructure when they could,” said Shih, referring to highways, ports and transport links that allow easy movement of goods.
Apple will also face a lot more red tape in India if it wants to create sprawling Chinese-style campuses.
“Will India be able to replicate a Shenzhen version?” asked Pathak, referring to China’s manufacturing hub. Building such “hotspots” won’t be easy and would require India to think about issues ranging from logistics and infrastructure to the availability of workers, he added.
Experts told CNN that accessing land in a chaotic democracy like India could be a challenge, while the Chinese Communist Party faces fewer barriers to expropriating real estate quickly for causes it deems important.
India would also have to think about moving beyond simply assembling iPhones through favorable government policies.
“You need to source components locally, which means you need to attract many more companies in the supply chain to set up shop in India,” Pathak said.
Some of the biggest businesses in India may be stepping up. According to Bloomberg, autos-to-airline conglomerate Tata Group is in talks with Wistron to take over the Taiwanese company’s factory in southern India.
Tata and Wistron did not respond to request for comment.
“I am not directly involved in that, but it should be really good for India because this is going to create an opportunity in India to manufacture electronics and microelectronics,” N. Ganapathy Subramaniam, COO of Tata Consultancy Services, the group’s software services arm, told Bloomberg.
While there are significant obstacles in India’s ambition to deepen its relationship with Apple, doing so would be a huge boost for the country and Prime Minister Narendra Modi.
‘I think it’ll be [a] big, big win,” said Pathak, noting that growing manufacturing ties with a US giant like Apple will in turn attract other global players in the electronics manufacturing ecosystem to India. “You focus on the big one, the others will follow.”
— Catherine Thorbecke and Juliana Liu contributed reporting.
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The purpose of this contribution is to support efforts to increase device ownership, digital literacy, and digital inclusion while helping the environment.
Press Release
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Feb 8, 2023 08:00 EST
NORTH CONWAY, N.H., February 8, 2023 (Newswire.com)
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Digitunity, a national nonprofit organization that connects people in need with donated computers, today announced that the Avery Dennison Foundation has provided a $10,000 donation to support the organization’s efforts to increase digital inclusion through device ownership.
Since the mid-1980s, Digitunity, its predecessor organization, and community partners have placed hundreds of thousands of computers with people in need. Providing that technology is essential to helping people to succeed in school, participate in the economy, and improve their communities.
“We’re thrilled to have an organization like the Avery Dennison Foundation join our mission to close the digital divide,” said Scot Henley, Executive Director of Digitunity. “With the help of this contribution, we’ll be able to elevate the issue, accelerate our efforts, and help more community-based organizations obtain the technology they need for their constituents.”
Avery Dennison is a materials science and manufacturing company specialized in the design and manufacture of labeling and functional materials. Its foundation, the Avery Dennison Foundation, advances the causes of education, sustainability, and women’s empowerment.
With sustainability as one of its core values, the Avery Dennison Foundation’s contribution to Digitunity reflects this value by helping to keep e-waste out of the landfill while also encouraging others to donate to this environmentally-oriented organization.
According to the United Nations, in 2019, 53.6 million tons of e-waste were discarded. Digitunity sees this as an opportunity to help both people and the environment. An estimated 36 million people in the U.S. do not have a computer at home. Computer donation and reuse is a practical, environmentally-friendly solution for expanding device ownership.
“Our support of Digitunity and their work to increase digital equity through the reuse of and equitable access to technology devices aligns with our ongoing commitment to sustainability and social good,” said Janet Sandoval, Director of Global Corporate Social Responsibility at the Avery Dennison Foundation. “Such contributions are integral to investing in our employees, consumers, and community.”
By linking corporate and individual donors with partner organizations in its network, Digitunity places thousands of computers each year with individuals who need them for education, work, and daily living. This, in turn, provides computers that may have otherwise been discarded a second life and individuals with the technology they need.
Digitunity is in discussion with a number of leading businesses and other organizations to provide similar sponsorships and donations in the coming year. Please visit Digitunity.org to learn more about Digitunity and its corporate giving programs, including the Corporate Pledge to End the Digital Divide.
About Digitunity
Since the 1980s, Digitunity has advanced digital inclusion by connecting donors of technology with organizations serving people in need. Our mission is to ensure everyone who needs a computer has one, along with robust internet connectivity and digital literacy skills. To learn more about our mission, please visit Digitunity.org.
About Avery Dennison
Avery Dennison is a materials science and manufacturing company specialized in designing and manufacturing labeling and functional materials. Their expertise and global scale enable them to deliver innovative, sustainable, and intelligent solutions around the world. To learn more, please visit averydennison.com.
About The Avery Dennison Foundation
The Avery Dennison Foundation advances the causes of education, sustainability, and women’s empowerment in communities where Avery Dennison employees live and work. To learn more, please visit averydennison.com.
Source: Digitunity
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